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ECONOMICS
UNIT CODE: HC1072
UNIT NAME: ECONOMICS AND INTERNATIONAL TRADE
ASSIGNMENT: TUTORIAL QUESTIONS ASSIGNMENT
Table of Contents
Tutorial 1 Week 2    3
a) Positive and Normative Economics    3
b) Similarities between Micro and Macroeconomics    4
c) Differences between Micro and Macroeconomics    4
Tutorial 2 Week 3    5
Price Ceiling    5
Price Flooring    5
Tutorial Week 4    6
Agreeing or Disagreeing with the Provided Statement    6
Tutorial 5/6 Week 6/7    6
Advantages of Oligopoly    6
Disadvantages of Oligopoly    7
Tutorial 9 Week 10    7
a) Comparing and Contrast Frictional Unemployment versus Structural Unemployment    7
b) An Action Taken by Government to Reduce Unemployment    7
Tutorial 10/11 Week 12    8
a) Advantages and Disadvantages of Fiscal Policy    8
b) GDP of Fiji Using Expenditure Model    8
References    9
Tutorial 1 Week 2
a) Positive and Normative Economics
The theory of economics, which focuses on the concepts of description, qualification and explanation of economic developments, is called on positive economics. Positive economics relies on data analysis, relevant facts and associated figures. It establishes a cause and effect relationship. The theories ascertained after running tests on the developed economic theories. Positive economics is factual and has an objective.
The facts are precise, descriptive and measurable. The measurements are based on tangible evidence. A situation of approval-disapproval never arises in positive economics (Hedoin, 2017). Government provided health services is an example of positive economics. The statements of this example have no value judgement attached to it. The validity of the statements of the cited example can be proven through a study of healthcare spending.
Normative economics on the other hand is based on value judgments. It is a subjective concept. The judgements find their origin from personal perspectives, feelings and opinions. It focuses on the “what should be” concept. The statements of normative economics are guided by aims of development, investment projects and other scenarios. The theory of normative economics is best known to summarise people’s desires for different economic developments.
Normative economics also tries to understand how people react in various situations by asking questions about what should happen (Van Reenen, 2018). The nature of the normative statements is rigid. An example of normative economics can be a statement like “government should provide basic healthcare to all citizens. It can be observed that this statement is a value-based type.
Importance of normative economics is more in economic policies and observations. Normative economics involves deep-rooted thinking. The conclusion that one arrives at through the application of a normative thinking approach is more generalised and subjective in nature. It has been observed a higher degree of disagreement persists in a discussion of normative economics.
In such neither discussions neither party is seen to prove their correctness. The opinions derived from the normative statements have the ability to change a policy-making framework completely. In contrast to this, positive economics fulfils the objective angle of cause-and-effect. Coupled with normative economics, positive economics is also crucial for the decision making purpose.
Both the theories of economics are helpful in generating, establishing and fulfilling news ideas to meet various economic developmental goals. A clear understanding of both the concepts and the existing difference between them leads to better policy making. The policies might be based on the balance mix of facts of positive economics and normative economics. The policy issues of international trade and welfare economics are majorly based on normative economics.
b) Similarities between Micro and Macroeconomics
Microeconomics is one branch of economics. Microeconomics deals with the economic behaviour of each unit of an economy. The study of each unit of an economy includes the study on individuals, companies or the industrial sector. Microeconomics also studies the impact of economic changes in decision making in a market (Akman, 2017).
It is a type of social science. On the other hand, macroeconomics is the study, which occurs in macro scale. It includes the study of unemployment...